Bitcoin surged to a two-year high, surpassing $65,000 on Monday and approaching record levels. Analysts say this cryptocurrency is going for a new record high.
Bitcoin – artistic impression. Image credit: Aleksi Räisä via Unsplash, free license
With a session peak of $65,537 in European trading, Bitcoin demonstrated a 4% increase, reaching $65,045. This follows its recent two-year high in Asian trading.
Bitcoin’s impressive 50% gain this year has been particularly notable in recent weeks, coinciding with a surge in inflows into U.S.-listed Bitcoin funds.
The approval of spot bitcoin exchange-traded funds in the United States has played a significant role in attracting new substantial investors, rekindling enthusiasm and momentum reminiscent of the 2021 rally to record levels.
Analysts note that investor confidence remains strong, contributing to sustained positive flows into the cryptocurrency.
In the week ending March 1, the net inflow into the ten largest U.S. spot bitcoin funds amounted to $2.17 billion, with over half of this capital directed toward BlackRock’s iShares Bitcoin Trust (IBIT.O).
Meanwhile, Ethereum, a smaller counterpart, has surged by 50% year-to-date, riding on speculation that it may soon witness increased inflows through the introduction of exchange-traded funds. On Monday, Ethereum traded at two-year highs, recording a 2.6% daily gain and reaching $3,518.
This cryptocurrency rally coincides with record-breaking performances in major stock indexes, including Japan’s Nikkei (.N225), the S&P 500 (.SPX), and the tech-heavy Nasdaq (.IXIC). Simultaneously, volatility indicators in equities (.VIX) and foreign exchange (.DBCVIX) have trended lower.
Analysts posit that in an environment where the Nasdaq is achieving new all-time highs, cryptocurrencies, particularly bitcoin, are likely to perform well, serving as a high-volatility tech proxy and a gauge of market liquidity. The prevailing market conditions reflect a return to a 2021-style market characterized by widespread optimism and upward trends.
Written by Alius Noreika